The potential merger between daily-fantasy-sports giants DraftKings and FanDuel is officially off.
Reuters reported on Thursday that the two companies will “terminate a planned merger after a legal challenge by U.S. antitrust enforcers.”
Last month, a federal judge ordered a halt to merger talks between DraftKings and FanDuel. That was after the U.S. Federal Trade Commission said it would try to block the merger because it would result in the combined companies controlling more than 90 percent of the U.S. market for paid daily fantasy sports. DraftKings and FanDuel had argued that it is not just part of daily fantasy sports, but rather the broader category of fantasy sports.
FanDuel started in 2009 while DraftKings launched in 2012. Both companies are estimated to be worth around $1.2 billion, according to documents obtained by Axios. DraftKings is the leader in daily fantasy golf while FanDuel recently added golf contests this year.
This news does not have a immediate direct effect on the everyday daily fantasy player. Even during merger discussions, both sites operated as usual, and they will continue to do so. However, there could have been a long-term effect. The merger was expected to be a financial gain for the two companies, who were wanting to compete with bigger fantasy-sports companies. If completed, the merger would’ve equaled more revenue, which would have meant more daily fantasy players, higher-stakes contests, etc. (But what they never had, daily fantasy players surely won’t miss, right?)
Said DraftKings in an email to its users: “Today we formally terminated our merger with FanDuel and will withdraw litigation from the Federal Trade Commission (FTC). This means we will move forward as a separate company, which we believe is the best course in the interest of you – our customers and avid sports fans.
“We want to reassure you that you will not notice any changes to your account or your experience with us as a result of this decision. We will continue to offer best-in-class contests, prizes, and offerings to our players. We will continue to focus our resources and expertise on enhancing our products and features so we can deliver the exceptional sports entertainment experience you have always had and love with DraftKings.”
Now back to focusing on themselves as separate entities, DraftKings and FanDuel are back to competing for advertising dollars and gamers.